West African Development Bank is raising XOF115 billion to support the 2014-2015 cotton season in Benin
For the third consecutive year, the West African Development Bank (BOAD) in its capacity as Arranger, is raising funds to support the cotton season in Benin. The Agreement relating thereto was signed by and between Mr. Christian Adovelande, President of BOAD and the Managing Director of the Office national de soutien des revenus agricoles (National office for farm income support) (Borrower) and the Managers of local banks involved in the transaction.
This Agreement was signed as part of the mandate on technical and financial assistance entrusted to BOAD by the Government of Benin in February 2014 with the aim of mobilizing funds for the 2014-2015 cotton season. BOAD succeeded in rallying around itself local banks to raise a facility of XOF115 billion, to which the local banking system contributed to the tune of 79%. Members of the banking pool include ECOBANK (Agent Bank), BOA, Banque Atlantique, BGFI, Diamond Bank, BSIC and UBA. In addition to its role as an arranger, BOAD provides financing in an amount of XOF25 billion to this operation.
Funds mobilized will be used to cover financial needs during the 2014-2015 cotton season, including cotton purchase from producers, ginning as well as storage, evacuation and marketing of cotton fiber and by-products. Projections for the cotton season show a cottonseed production of 360,000 tons over an area sown of nearly 400,000 hectares.
Expressing his satisfaction at the trust renewed to his institution by the Beninese Authorities, Mr. Christian Adovelande stated that “this financial support provided by BOAD, complementary to that of the local banking system, is in line with the Bank’s strategic directions as well as Policy Statement”.
This third Agreement is attributable to the success of the two previous ones. The Government of Benin requested the support of BOAD for the 2012-2013 cotton season. The sub-regional institution then rallied around itself a pool of local banks and raised XOF82 billion, with Beninese banks contributing XOF62 billion, or 76% of the facility. Those resources made it possible to sow 351,000 hectares for a production of 240,000 tons of cottonseed. The facility was fully repaid at maturity.
Based on these positive results, the Government of Benin entrusted to the Bank a second mandate for supporting and assisting in structuring and raising a facility of XOF115 billion to cover all needs associated with the 2013-2014 cotton season. For this second facility, local banks contributed to the tune of 79%. 347,000 hectares were sown for a production of 307,355 tons of cottonseed.